Alterations in basic auditory perception in persons with schizophrenia have been noted in many studies. Although reports of abnormalities in auditory anatomy and physiology have been described, very little is known regarding precisely how the changes in auditory brain structure and function relate to the behavioral findings. In addition, the relationship between perceptual phenomena and salient clinical features of the disorder such as hallucinations and thought disorder is also poorly understood. We propose to study the brain processes involved in auditory processing at the cortical level in schizophrenia using magnetoencephalography (MEG), auditory psychophysics, and magnetic resonance imaging (MRI). Forty subjects diagnosed with schizophrenia and 40 age-and sex-matched, non-psychiatric comparison subjects will be studied using a variety of behavioral and physiological metrics of auditory function. Psychoacoustic measures of absolute and difference thresholds, perceptual distance, and sound lateralization will be compared to MEG measurements of their physiological correlates in the auditory system. Detailed clinical evaluations will provide information relating state and trait psychotic symptom experiences with alterations in function and structure. High- resolution MRI scans will provide data for detailed morphological analyses of the underlying auditory anatomy, including the superior temporal gyrus and its relevant sub-structures, Heschl's gyrus and the planum temporale. We hypothesize that alterations in the fundamental structure-function relationships in the auditory cortex underlie alterations in basic perceptual processes. These fundamental perceptual abilities, in turn, may affect higher-order cognitive brain functions in schizophrenia, and are therefore critical to our understanding of the disorder.